IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

The productive efficiency of Chinese hospitals

  • Ng, Ying Chu
Registered author(s):

    Since the implementation of health care reforms, much has been documented regarding the practices and behavior of hospitals or health profession in China. While these documentations pointed to various problems arising from the reforms, a systematic analysis is rarely found. Based on five years' data, the present study aims at providing empirical evidence of inefficiency of hospitals in China. Using the data envelopment analysis, the sources of inefficiency were examined. Echoing the unnecessary care, over-prescription of drugs and the adoption of high-tech treatments since the implementation of health care reforms, the sampled hospitals were found quite inefficient and pure technical inefficiency played a dominant role in driving the inefficiency of hospitals. Combining the panel nature of the data and the Malmquist Index computation, hospitals had experienced productivity growth between 2004 and 2008. Mirroring the behavior of hospitals, technological progress was the underlying force for the growth and the deterioration in efficiency change was found. The results summarized by region revealed that the stage of economic development and the efficiency performance of hospital did not necessarily go hand in hand.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 22 (2011)
    Issue (Month): 3 (September)
    Pages: 428-439

    in new window

    Handle: RePEc:eee:chieco:v:22:y:2011:i:3:p:428-439
    Contact details of provider: Web page:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Eggleston, Karen & Ling, Li & Qingyue, Meng & Lindelow, Magnus & Wagstaff, Adam, 2006. "Health Service Delivery in China: A Literature Review," Policy Research Working Paper Series 3978, The World Bank.
    2. Meng, Qingyue & Rehnberg, Clas & Zhuang, Ning & Bian, Ying & Tomson, Goran & Tang, Shenglan, 2004. "The impact of urban health insurance reform on hospital charges: a case study from two cities in China," Health Policy, Elsevier, vol. 68(2), pages 197-209, May.
    3. L. Steinmann & P. Zweifel, 2003. "On the (in)efficiency of Swiss hospitals," Applied Economics, Taylor & Francis Journals, vol. 35(3), pages 361-370.
    4. Emrouznejad, Ali & Parker, Barnett R. & Tavares, Gabriel, 2008. "Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 151-157, September.
    5. David M. Cutler & Ernst R. Berndt, 2001. "Medical Care Output and Productivity," NBER Books, National Bureau of Economic Research, Inc, number cutl01-1, December.
    6. Bruce Hollingsworth, 2008. "The measurement of efficiency and productivity of health care delivery," Health Economics, John Wiley & Sons, Ltd., vol. 17(10), pages 1107-1128.
    7. Rolf Färe & Shawna Grosskopf & William L. Weber, 1989. "Measuring School District Performance," Public Finance Review, , vol. 17(4), pages 409-428, October.
    8. Lukas Steinmann & Gunnar Dittrich & Alexander Karmann & Peter Zweifel, 2004. "Measuring and comparing the (in)efficiency of German and Swiss hospitals," The European Journal of Health Economics, Springer, vol. 5(3), pages 216-226, September.
    9. Karen Eggleston & Keqin Rao & Jian Wang, 2005. "From Plan to Market in the Health Sector? China's Experience," Discussion Papers Series, Department of Economics, Tufts University 0501, Department of Economics, Tufts University.
    10. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    11. Adam Wagstaff & Winnie Yip & Magnus Lindelow & William C. Hsiao, 2009. "China's health system and its reform: a review of recent studies," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages S7-S23, July.
    12. Nikolaos Maniadakis & Emmanuel Thanassoulis, 2000. "Assessing productivity changes in UK hospitals reflecting technology and input prices," Applied Economics, Taylor & Francis Journals, vol. 32(12), pages 1575-1589.
    13. Chang, Hsihui & Cheng, Mei-Ai & Das, Somnath, 2004. "Hospital ownership and operating efficiency: Evidence from Taiwan," European Journal of Operational Research, Elsevier, vol. 159(2), pages 513-527, December.
    14. Gary Ferrier & Michael Rosko & Vivian Valdmanis, 2006. "Analysis of uncompensated hospital care using a DEA model of output congestion," Health Care Management Science, Springer, vol. 9(2), pages 181-188, May.
    15. Margit Sommersguter-Reichmann, 2000. "The impact of the Austrian hospital financing reform on hospital productivity: empirical evidence on efficiency and technology changes using a non-parametric input-based Malmquist approach," Health Care Management Science, Springer, vol. 3(4), pages 309-321, September.
    16. E Zere & Diane Mcintyre & T Addison, 2001. "Technical Efficiency And Productivity Of Public Sector Hospitals In Three South African Provinces," South African Journal of Economics, Economic Society of South Africa, vol. 69(2), pages 336-358, 06.
    17. Gian Paolo Barbetta & Gilberto Turati & Angelo Zago, 2004. "Behavioral Differences Between Public and Private Not-For-Profit Hospitals in the Italian National Health Service," Working Papers 12/2004, University of Verona, Department of Economics.
    18. Jens Leth. Hougaard & Lars Peter. sterdal & Yi Yu, 2011. "The Chinese Healthcare System: Structure, Problems and Challenges," Applied Health Economics and Health Policy, Springer Healthcare | Adis, vol. 9(1), pages 1-13.
    19. David M. Cutler & Ernst R. Berndt, 2001. "Introduction to "Medical Care Output and Productivity"," NBER Chapters, in: Medical Care Output and Productivity, pages 1-12 National Bureau of Economic Research, Inc.
    20. Anatoly I. Pilyavsky & William E. Aaronson & Patrick M. Bernet & Michael D. Rosko & Vivian G. Valdmanis & Mikhail V. Golubchikov, 2006. "East-west: does it make a difference to hospital efficiencies in Ukraine?," Health Economics, John Wiley & Sons, Ltd., vol. 15(11), pages 1173-1186.
    21. Richard Herd & Yu-Wei Hu & Vincent Koen, 2010. "Improving China's Health Care System," OECD Economics Department Working Papers 751, OECD Publishing.
    22. Matthias Staat, 2006. "Efficiency of hospitals in Germany: a DEA-bootstrap approach," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2255-2263.
    23. Liu, Xingzhu & Mills, Anne, 2002. "Financing reforms of public health services in China: lessons for other nations," Social Science & Medicine, Elsevier, vol. 54(11), pages 1691-1698, June.
    24. Yip, Winnie & Hsiao, William, 2009. "China's health care reform: A tentative assessment," China Economic Review, Elsevier, vol. 20(4), pages 613-619, December.
    25. Gillian McCallion & J. Colin Glass & Robert Jackson & Christine Kerr & Donal McKillop, 2000. "Investigating productivity change and hospital size: a nonparametric frontier approach," Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 161-174.
    26. H. Brown & José Pagán, 2006. "Managed care and the scale efficiency of US hospitals," International Journal of Health Care Finance and Economics, Springer, vol. 6(4), pages 278-289, December.
    27. Brenda Gannon, 2005. "Testing for Variation in Technical Efficiency of Hospitals in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 273-294.
    28. O'Neill, Liam & Rauner, Marion & Heidenberger, Kurt & Kraus, Markus, 2008. "A cross-national comparison and taxonomy of DEA-based hospital efficiency studies," Socio-Economic Planning Sciences, Elsevier, vol. 42(3), pages 158-189, September.
    29. Dino Rizzi & Vincenzo Rebba, 2006. "Measuring Hospital Efficiency through Data Envelopment Analysis when Policy-makers’ Preferences Matter. An Application to a sample of Italian NHS hospitals," Working Papers 2006_13, Department of Economics, University of Venice "Ca' Foscari".
    30. Chen, Andrew & Hwang, Yuhchang & Shao, Benjamin, 2005. "Measurement and sources of overall and input inefficiencies: Evidences and implications in hospital services," European Journal of Operational Research, Elsevier, vol. 161(2), pages 447-468, March.
    31. Fare, Rolf & Grosskopf, Shawna & Yaisawarng, Suthathip & Li, Sung Ko & Wang, Zhaoping, 1990. "Productivity growth in Illinois electric utilities," Resources and Energy, Elsevier, vol. 12(4), pages 383-398, December.
    32. Karen Eggleston & Winnie Yip, 2004. "Hospital Competition under Regulated Prices: Application to Urban Health Sector Reforms in China," Discussion Papers Series, Department of Economics, Tufts University 0401, Department of Economics, Tufts University.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:22:y:2011:i:3:p:428-439. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.